Dispensing Hope: Transforming US Medicine Surplus

Commitment by

Mindset Social Innovation Foundation

In 2014, Mindset Social Innovation Foundation, and its partners, committed to expand access to affordable prescription medications in the U.S. Mindset has developed a five-year plan with the Dispensary of Hope that will enable the organization to receive over $100 million of donated medicine per year and distribute this medicine through hospital-based and community-charitable pharmacies that will deliver impact to more than 1.2 million people over the next 5 years.

Partner(s) of the Commitment Maker(s)

APPROACH
Mindset is investing in the Dispensary of Hope (DoH), a US 501(c)(3) charitable medication distributor that has established a track record of connecting surplus medication from manufacturers and providers to clinics and pharmacies serving the poor and uninsured. Since 2010, the DoH has collected over million of donated medication.
Mindset has developed a five year plan with the DoH that enables the organization to receive over million of donated medicine per year and distribute this medicine through hospital-based and community charitable pharmacies; which will impact more than 1.2 million people over the next 5 years.
The plan also involves enabling the DoH operation to be entirely self-sustaining within 5 years through subscription fees. To achieve this result will require an investment of million.
This collaborative initiative includes several key partners:
Mindset Social Innovation Foundation is committed to providing business support and financial support, totaling ,000 to the scaling efforts.
Saint Thomas Health will invest million over 4 years, as well as provide gratis administrative assistance in human resources, finance, IT, and legal. Saint Thomas Health will also offer compliance and auditing oversight.
Ascension Health and CHE Trinity Health have committed to participate by opening a meaningful number of medication distribution pharmacies across the United States.
Generic drug manufacturers, such as Lannett Pharmaceuticals, have agreed to execute donor contracts which will supply billion in overproduction short-dated medication (12 to 4 months from expiration) as well as a supply of long-dated inventory to stabilize and cover dosage and molecule gaps among the 400 chemical and dosage safety net formulary.
ACTION PLAN
The five year commitment has three interrelated activities:
a) Medicine Donations: to build a growing secure supply of donated medicine for the most needed medications
b) Network Subscriptions: to build a growing subscription based network of pharmacies and clinics serving the poor and uninsured
c) Distribution: to ensure that the operations can match supply with demand as efficiently as possible
Q4-2014 Pre-Launch Steps
Medication Donations:
- Formalize support of existing donors
- Meet with manufacturer association
- Organize 3 conference exhibits
- Celebrate existing donors
Network Subscriptions:
- Secure key sales staff and devise site recruitment pipeline
- Develop sales 'package' for pharmacies
- Assemble speakers guild of example references
Distribution:
- Develop plans for warehouse expansion
- Initial meetings with inventory systems providers
- Recruit additional warehouse staff
2015 Actions
Medication Donations
- Identify and target manufacturers (Q1-Q4)
- Develop a drug list - matching need and supply (Q1-Q2)
- Secure million (AWP) in medication donations (Q1-Q4)
Subscriptions:
- Develop sales package and design turnkey implementation package (Q1-Q4)
- Secure 53 sites by the end of 2015 (Q1-Q4)
- Secure over ,000 in subscriptions (Q1-Q4)
Distribution:
- Expand warehouse facility (Q3-Q4)
- Purchase inventory system - migration of existing system and training (Q3-Q4)
- Distribute over million medications (Wholesale Adjusted Cost) (Q1-Q4)
Q1: secure million (AWP) in medication donations, 1 access site, over ,000 in subscriptions, and distribute over .5 million medications (WAC)
Q2: secure million (AWP) in medication donations, 2 access sites, over ,000 in subscriptions, and distribute over .5 million medications (WAC)
Q3: secure million (AWP) in medication donations, 2 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q4: secure million (AWP) in medication donations, 2 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
2016 Actions
Medication Donations:
- Identify and target manufacturers (Q1-Q4)
- Secure million (AWP) in medication donations (Q1-Q4)
Subscriptions:
- Continue to develop sales package and design turnkey implementation package (Q1-Q4)
- Secure 71 sites by the end of 2016 (Q1-Q4)
- Secure over ,000 in subscriptions (Q1-Q4)
Distribution:
- Continue to upgrade Warehouse (Q1-Q4)
- Distribute over million medications (Wholesale Adjusted Cost) (Q1-Q4)
Q1: secure million (AWP) in medication donations, 3 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q2: secure million (AWP) in medication donations, 4 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q3: secure million (AWP) in medication donations, 5 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q4: secure million (AWP) in medication donations, 6 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
2017 Actions
Medication Donations:
- Secure million (AWP) in medication donations (Q1-Q4)
Subscriptions:
- Secure 103 sites by the end of 2017 (Q1-Q4)
- Secure over ,000 in subscriptions (Q1-Q4)
Distribution:
- Distribute over million medications (WAC) (Q1-Q4)
Q1: secure million (AWP) in medication donations, 7 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q2: secure million (AWP) in medication donations, 8 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q3: secure million (AWP) in medication donations, 8 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q4: secure million (AWP) in medication donations, 9 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
2018 Actions
Medication Donations:
- Secure million (AWP) in medication donations (Q1-Q4)
Subscriptions:
- Secure 153 Access Sites by the end of 2018 (Q1-Q4)
- Receive over .5 million in subscriptions (Q1-Q4)
Distribution:
-Distribute over million medications (WAC) (Q1-Q4)
Q1: secure million (AWP) in medication donations, 10 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q2: secure million (AWP) in medication donations, 12 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q3: secure million (AWP) in medication donations, 14 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q4: secure million (AWP) in medication donations, 14 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
2019 Actions
Medication Donations:
- Secure million (AWP) in medication donations (Q1-Q4)
Subscriptions:
- Secure 220 sites by the end of 2017 (Q1-Q4)
- Secure over .2 million in subscriptions (Q1-Q4)
Distribution:
- Distribute over million medications (WAC) (Q1-Q4)
Q1: secure million (AWP) in medication donations, 15 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q2: secure million (AWP) in medication donations, 16 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q3: secure million (AWP) in medication donations, 17 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)
Q4: secure million (AWP) in medication donations, 19 access sites, over ,000 in subscriptions, and distribute over million medications (WAC)

Background

Millions of Americans lack the ability to afford prescription medications. While the Affordable Care Act has increased the number of those with health insurance, the Congressional Budget Office believes that as many as 30 million Americans will still be without access to affordable care in 2024 (Congressional Budget Office, 2014). A disproportionate percentage of these individuals are chronically ill and need regular access to medication.
At the same time, regulation and logistics challenges result in the incineration of millions of dollars of medication. While some schemes exist for branded medicine, there are few options available to recover generics which account for over 80% of all prescriptions in the United States (IMS Institute for Healthcare Informatics, 2014). No public data is available on the total amount of usable surplus medication available but some pharmaceutical sources estimate that well over billion annually (average wholesale price) is incinerated.
This medicine is desperately needed. One in three Americans with a chronic disease has difficulty paying for food, medications or both (Berkowitz et al., 2014). Last year, fifty million Americans did not fulfill a prescription (Luhby, 2013) and one in four seniors did not fill a prescription or cut back on doses, all because of cost (American Public Health Association).
Individuals unable to access medications, or who delay taking them, not only have poorer health status, they also are more likely to access emergency rooms, become hospitalized and have cardiovascular events (Cohen et al., 2013). It is estimated that failure to comply with medication prescriptions can cost the country up to billion a year (Fung, 2012).
The challenge is to ensure that no medication is destroyed in the US when it could have been given to people who urgently need it.

Partnership Opportunities

The Dispensary of Hope is welcoming new drug manufacturers to join the effort, donating surplus medication into this national network. Similarly, new safety net clinics, pharmacies, and hospital pharmacies are being welcomed to participate in dispensing this medication, for free and in support of the goals of this national collaborative. For more information, please visit www.dispensaryofhope.org.

Similarly, the Dispensary of Hope is looking for national distribution and shipping partners to learn about the effort and consider participating, either as expert contributors, or as logistics vendors.

Progress Reports

March 2016

While the project is only eight months into its planned 5-year process, it is moving forward according to plan. In 2015, the Dispensary of Hope (DoH) distributed $13.9 million (Wholesale Acquisition Cost, or WAC valuation) in medication to over 70 sites across the United States. This total resulted in 123,588 patient encounters. Despite this substantial impact, the DoH's drug donor network of a dozen and a half leading manufacturers is growing monthly as new manufacturers are joining the national effort. These producers represent a substantial minority portion of the US generic drug manufacturing industry's annual sales, and in 2015, offered $1.3 billion in medication (WAC valuation) to DoH. This tremendous offer was more than the DoH could distribute.

By 2020, the expense to run the operation will be an overall annual cost of $2,508,044, a scale that would allow DoH todistribute $50,000,000 (WAC valuation) annually. At that time, the DoH will return a substantial annual value to its stakeholders return on investment of $18.79 in donated medication distributed for every $1 in operating expenses.

Aside from supply chain growth, major activities have included the addition of staff, IT and a facility.This capacity-building investment is still mid-way through its progress, and will result in a network development staff team adequate to manage growth, and enough facility space and infrastructure to accommodate an increasing volume of throughput.

Finally, it is not enough to secure donated product. Partners are needed to dispense the product to the uninsured. The DoH has developed pilot testing projects with several of the nation's largest health systems to do just that. These pilot programs are in their early phase but are progressing well, and though only 3-6 months old, are already producing data that demonstrate the opportunity to scale charitable pharmacy operations in several new states.